November 24, 2020
Please find here the newest edition of our COVID-19 global customer advisory update. Every other week this update will give you up-to-date guidance and orientation over all business areas and all geographies.
Please continue to be engaged with your DB Schenker Account Managers on your latest plans, prices and projections. They will invest the utmost effort to support your business with corresponding solutions.
Executive SummaryOcean Freight
(Nov 24, 2020) - Demand in the global airfreight market is increasing and remains on a very high level. In particular Asia Pacific Outbound demand has already led to a strong peak season with limited supply due to COVID-19 capacity implications. Freighter capacity is limited and aircraft utilization has reached similar peak levels in the first half of 2020. The strong demand has therefore led to additional charter flights to supply additional capacity on major trades. In the short-term passenger freighter flights can become a more viable option on several trades to supply additional capacity to overcome the expected supply shortage until year end.
Furthermore, the situation across many large economies (e.g. USA, Germany, China) has become more critical due to regulations related to COVID-19. These key countries are now additionally challenged with increased ground handling times at large airport terminals and warehouses. The increase in COVID-19 cases has led across various countries to delays in the operational processes due to staff shortage and positive COVID-19 cases across the workforce. Further the overall strong airfreight market and volumes show no sign of relief in the short-term. Therefore, the situation is also expected to lead to slightly long transit times until the market is softening again or the COVID-19 situation across the countries stabilizes.
Spotlight: COVID-19 Vaccine Logistics
Key leading pharmaceutical manufacturers have recently announced significant progress related to their COVID-19 vaccine developments. A critical item that will impact the transportation requirements and supply chain planning is the temperature requirement of a vaccine product. Many countries are not prepared for deep frozen storage and have a lack of capabilities related to such products. As the air cargo market is preparing further to global support for the distribution and supply of a vaccine the implications highly change from one-year to the next. In the initial phase less of an impact is forecasted due to the limited supply and key personnel receiving the COVID-19 vaccination. Once the vaccine reaches a second phase with a global distribution into key major economies the capacity demand will increase. During this phase we expect a supply from the USA and Europe to key economies in the world that have also pre-ordered vaccines from the key manufacturers. The containerized supply will not only demand additional capacity from major vaccine production sites in the US and Europe, but also require a container repositioning cycle and reverse logistics process. Therefore, additional demand is as well expected from the receiving countries of a vaccine product back to the production sites to allow the equipment to return to it’s required locations. Due to further imbalance of supply and demand this additional demand can lead to a further shortage of supply globally.
Our console charter flight schedule now includes the following flight operations:
→ Europe – China – Europe: 4 flights per week (B747-400F)→ Hongkong – Europe: 2 flights per week (B747-400F)→ China – USA: 3 flights per week (B747-400F)→ Europe – USA – Europe: 3 flights per week (MD11F and B747-400F)→ Europe – India – Europe: 1 flight per week (B747-400F)
(Nov 24, 2020) - All offices remain in full operation with access to terminal handling and ground transportation. All our European hubs deliver import and receive export freight with small to no backlogs recorded towards the weekend. Inbound delays up to maximum one day do occur exceptionally. Operationally, our linehauls to and from the hubs are running as scheduled. Outbound space situation is stable.Only exceptions:Space is restricted to North America and South Afrika.Almost no space available to South America.
(Nov 24, 2020) - Shanghai Pudong Airport expects congestion and delays, due to reported COVID-19 infection cases linked to Airport Cargo employees, with latest case reported on Tuesday, Nov 24th. Hundreds of Inbound and Outbound flights have been cancelled as the airport tests over 17,000 employees. A similar situation at Tianjin International Airport is also reported as nearly half of all scheduled flights are cancelled, due to measures to mitigate local outbreak.
The incidents underscore the continued risk on operations and the vigilance necessary to cope with the ever-present COVID-19 situation.
Though resurging COVID-19 infections are evident and tight controls remain in some countries across APAC, our air freight operations remain available to support customer needs. Delays will be expected in customs clearance and transportation. Alternatives to move / transport cargo via other gateways / routes are being established. Customers may contact the respective DB Schenker representatives for support or solutions if required.
Capacity is expected to remain volatile. We remain vigilant in monitoring the situation, to mitigate events with potential impact to operations.
(Nov 24, 2020) - Overall, the air freight operations in the countries remain uninterrupted even as Oman, Kenya, and South Africa slip into partial curfew. We continue to serve our customers. Our regional and global preferred carriers are seen to gradually increase the frequency of passenger cargo flights.
No operational restrictions for air cargo business
Qatar, Kenya, Oman, South Africa, Bahrain, Saudi Arabia, UAE, Egypt
Restrictions for operational air cargo business
(Nov 24, 2020) - The 4th quarter and a busy peak-season have placed a strain on capacity to varying degrees by trade-lane. In addition, airport terminals are at times running behind in transitioning cargo creating further challenges. Especially the ground handling situation at key major airport such as Chicago O’Hare has led to delays in the import ground handling process and workforce constraints due to COVID-19 impacts. The situation has improved, but DB Schenker closely monitors the situation to mitigate any impacts for our customers and inform you immediately in case of any change. DB Schenker Flight operations and part charters both transatlantic and transpacific are providing secure capacity for our customers, and our airport-based offices are providing the necessary coordination to provide the fastest release of cargo possible. Situation by trade-lane is as follows:
USA – Europe
→ Market demand is moderate to strong. Further charter flights have been launched with the Global Flight Operations Program to provide additional air cargo capacity to Europe. These flights are connecting Atlanta and Chicago with Frankfurt, Germany and other surrounding Central European markets. They offer DB Schenker customers a stable access to capacity in what continues to be a volatile market situation.
USA – Asia (excluding China)
→ Capacity has tightened on most trade-lanes as a 4th quarter peak has materialized with the strongest capacity challenges remaining with movements to Australia, Singapore and India. DB Schenker’s strong ‘Part Charter’ capacity in place from ORD to destinations in Australia, and flight operations via the DB Schenker Euro Hub from FRA – BOM are supporting DB Schenker customer demands to these destinations.
USA (exports to) – China
→ No capacity constraints to key destinations in China. Demand is moderate with the market supported by the large amount of inbound flight operations and charters that support capacity on the return leg to China.
USA – Latin Am / Latin Am to Europe and APAC
→ Intra-Americas: Market demand has grown significantly into the 4th quarter, with access to capacity becoming very tight with pricing moving up on all lane segments. Demand USA to Brazil and Chile having become much stronger, and critical situations remaining for movement to Peru and Bolivia from the USA, and between Brazil and Mexico.
→ Perishable peak season as well straining available capacity and increasing rates ex Latin America to USA, Europe and Asiatic destinations.
USA – Middle East / Africa
→ South Africa with continued strong demand and shortage of capacity.
(Nov 24, 2020) - Equipment availability remains very tight all over Asia with critical stock inventory in CN, VN, TH, but also India, Korea as well as Chinese inland places. Carriers push for utmost empty positioning activities ex Europe and North America back to Asia. At the same time, rates in all main trades remain high and keep on further increasing, especially from Asian Origins. Carriers apply very strict yield management and prioritize equipment release and space accordingly.
Capacity ex Asia runs at fullest utilization, in addition to the extra loader programs continue. Market is expected to produce full ships until Chinese New Year in January 2021. Given this positive momentum, industry analysts have revised their earlier more negative anticipation of the ocean freight to a more moderate negative 6% volume growth for 2020, with an outlook of a growth in 2021.
The current circumstances make it very important for our customers to plan volume forecast (we advise 4 to 8 weeks in advance) and be flexible to re-route cargo (for congested destinations).
The situation for exports ex Europe is more calm, however volumes on the exports are improving and vessel utilizations increase. Rates remain stable with a trend upwards.
Please expect the situation on all trades subject to continuous changes.
With an uncertain outlook on vessel utilizations and partly huge impacts on port terminals, we need to prepare for changing schedules and transit times (due to slow steaming, port omissions or additional port inclusions as a result of service mergers), sudden / unexpected delays in uplift, increased bottlenecks of equipment availability, inconsistent departures and sudden surcharges possibly resulting in higher costs for the supply chain.
Our experts in Ocean will support and guide for:
→ DB SchenkerOcean priority product on all main trades which guarantees loading within a fixed window.→ DB SchenkerOcean offers for alternate routing possibilities to ensure cargo is lifted from port of loading.→ Volume forecast and allocation planning: We have access to volumes on all alliances and support volumes planning through consultation services (allocation match based on customer forecast). Under progress: volume prediction per vertical.
Contact your DB Schenker Account Manager regarding Personal Protective Equipment services ex China Europe.
(Nov 24, 2020) - On trades to the West, the utilization to North America has improved to over 90%, however Latam destinations are in decline. It is expected that carriers will take additional actions on curtailing the capacity.
On exports ex Europe to the East, carriers still report strong booking situations with only limited shortfalls. Especially commodity volumes are still going strong (logs, chemicals). Equipment availability becomes a larger concern due to an upcoming 25 - 40% reduction of inbound flows plus expected longer usage of the equipment.
All European Ocean Freight Branches are fully functioning operationally.
(Nov 24, 2020) - Notwithstanding the severe market situation on rates and capacity as highlighted by Global Ocean, there are no significant COVID-19 impacted operations, as status remains unchanged.
Though resurging COVID-19 infections are evident in some countries across APAC, our Ocean operations remain available to support customer needs. Delays could be expected in customs clearance and transportation.
→ Alternatives to move / transport cargo via other gateways / routes are being established. Customers may contact the respective DB Schenker representatives for support or solutions should it be required.
(Nov 24, 2020) - DB Schenker is able to manage the current demand from customers even though an equipment shortage has been seen in the region.
→ Please get in touch with your DB Schenker Account Manager for the latest rates.
(Oct 13, 2020) - On the exports ex NORAM it is worthwhile to mention that especially to Asia, the vessel utilization remains strong with no inflation of market rates expected. Void sailings and service suspensions causing severe shortage of space on all North American gateways resulting in high vessel utilization factors across the board. Roll-overs and yield management are being applied by carriers. Extra loaders deployed and services being reinstated on ad-hoc basis. Asia to North America is peaking further and bookings Asia to South America have come up massively during the past two weeks. We continue to monitor the situation.
(Nov 24, 2020) - Europe Land is fully operational and available for business, managing existing constraints re-established during wave 2. Asia gives a heterogeneous picture with most countries fully operational and available for business while a few countries (such as India) are facing challenges, however operating. Asia Land bridge (China – South East Asia) as well as Eurasia Land bridge (China – Europe Train) are fully operating, although facing congestions. Land operations in the Americas are also showing constraints, but still working close to normal.
(Nov 24, 2020) - Restrictions to contain the COVID-19 pandemic are re-established in several European countries and in parts directly or indirectly affect the transportation of goods. For any potential cases of disruptive conditions, we follow our pre-defined contingency plans to ensure flows of cargo as much as possible. In addition, we are adapting our transport service offerings daily to the needs of our customers.
Some receivers continue to have limited operations and we ask all shippers to check the delivery possibility with the consignee to avoid cost for storage or return shipments.
Are you up- or down-scaling your business activity in response to the changing market environment? DB Schenker Landtransport is your partner with one of the strongest and most resilient networks across 40 countries in Europe. Moreover, with our digital channels like connect4Land we offer a 24/7 entry point to our transport services, easy to use from everywhere, every time – Click. Ship. Done.
(Nov 24, 2020) - There is no change in operational status nor updates since the previous advisory.
Our Domestic Land product continues unabated to provide our regular high level of service.
Our Asia Landbridge FTL / LTL road service still encounters intermittent reactionary border closures. However, all crossings are officially operational now the Thailand / Myanmar border has reopened. Border congestion due to high demand can add between 1 and 3 days to long distance trucking. DB Schenker staff at our border offices ensure lead-times are minimized through “triage” prioritization.
Additional labor and associated domicile costs are still required to strategically avoid lengthy quarantine periods for our international drivers.
Congestion levels continue to fluctuate on our Eurasia service for Rail and Road. We therefore recommend checking estimated lead-times with your Account Manager. Due to our dominance on this lane, DB Schenker are best positioned to provide optimum transit times to our customers.
Our Domestic and International road and rail services continue to meet the high demand and are strategically positioned to meet the forecast demand spike associated with ongoing reduced Ocean freight and Airfreight capacity.
(Nov 24, 2020) - International GCC land border connecting Saudi Arabia to other countries has been opened for land transportation / land freight movement with limited operations.
(Nov 24, 2020) -
→ USA: USA still experiencing tight capacity on West Coast, South Texas and in the Midwest. Anticipate capacity to be tight throughout the remainder of the year, as we continue into the peak season. Port volumes in Newark and Long Beach continue to keep drayage capacity very tight.→ Brazil: Market is running in normal conditions.→ Mexico: 100% fully operational.→ Canada: Toronto and Peel regions are on lockdown effective for 28 days. Other close by regions have moved to ‘red status’ which allows everything to be open, but with very strict limitations. Restaurants and retail are shut (except for curbside service). Department, hardware, grocery stores remain open as essential.
(Nov 24, 2020) - Our operations and customer services remain stable. No change in prioritizing protection of our staff and keeping our customers’ businesses running. With dedicated guidelines and preventive measures, we keep up our constant and short-term customer support.
→ In case you need temporary space, reach out to your DB Schenker Account-Manager or local contact person!
(Nov 24, 2020) - All sites in our operations in Europe currently remain fully operational with precautionary measures in place for the health of workers.
(Nov 24, 2020) - There is no significant change in status for APAC countries generally from previous updates. Tight controls remain in several APAC countries due to resurgent outbreaks. We remain vigilant in monitoring the situation, to mitigate events with potential impact to operations.
Due to extension of movement restrictions, some delays may be expected, albeit with no significant impact to our operational status.
→ For India, there have been no significant operational updates. Please refer to our India website for detailed information via download.→ For Greater China, no change in operational status, despite local outbreaks reported and being contained in some cities.
While governmental imposed restrictions in APAC countries continue at varying levels, our service levels so far are maintained with our CL operations available to support customer needs.
Delays may be expected due to availability of workforce and enhanced strictly enforced hygiene and monitoring SOPs. Customers may contact the respective DB Schenker representatives for further support if necessary.
(Nov 24, 2020) - All DB Schenker contract logistics facilities in MEA continue to operate with appropriate health and safety standards, even as Kenya and South Africa slip into partial curfew.
(Nov 24, 2020) - While observing increasing cases of COVID-19 infections across the region, our warehouses continue to operate, with precautionary measures in place for the health of our people and hence keeping up our customer services.
→ USA: All operations in the USA remain operational with precautionary measures in place for the health of our people and delivery of services to our clients. We are seeing increasing cases of COVID-19 in the USA and remain very robust in our safety measures and protocols.→ Mexico: COVID-19 numbers are increasing in Mexico. Some states do require partial shut downs of private life and economy in particular on weekends. We are doing everything possible to minimize the impact to our personnel and facilities.→ Canada: New restrictions affect non-essential retail in the regions of Toronto, Peel and the Province of Alberta. All sites in Canada remain operational with health and safety measures in place for the safety of our associates and continued service
DB Schenker is closely monitoring the COVID-19 situation. With precautionary measures in place, we are aiming to maintain full operability across all DB Schenker operations. In our offices across all continents, we have taken action to enable as many employees as possible to work from home to support the social distancing guidelines put in place by public authorities.
The next customer advisory will be the December 8 release or earlier should there be significant developments. Visit our website in advance to be among the first informed.
The 24/7 newsfeed on our website www.dbschenker.com offers additional links and downloads supporting the topics of this document. Please visit: 24/7 News Update
Thank you for your patience and support.DB Schenker COVID-19 Customer Advisory Team
We have used our utmost care in providing the information above. While the information above has been provided to the best of our knowledge and ability, the DB Schenker Group does not assume any liabilities arising from this information of the use thereof.
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